[personal profile] drscott
Some really good reporting from WaPo on why the Federal exchange was such an expensive failure here. I haven't written much about it because the press is now on the case and digging into the story.

Administration spinmeisters are trying to plug the leaks when real people report their premiums have increased for less coverage. One of the half-truths is that all the cancelled policies were "junk insurance" - which certainly exists; this is insurance with very low premiums that covers very little, though it may at least get you the negotiated insurance discount at providers. But many people who carefully researched their plans and had excellent insurance covering their needs, often with high deductibles but no limits, are also finding their policies cancelled, with new plans costing 50-100% more with even higher deductibles. The Administration is sending out its spokespeople to call these people liars and stupid for not understanding how much better the new policies are, a winning strategy if you want to really make some of the smartest and most influential people angry.

The situation is especially grim since millions of people who are losing their policies 12/31/13 are going to have to find replacements in less than two months. Many will be unable to act that fast, given the broken exchanges, and many will find the new policies unaffordable and hold off hoping for something better. This means it is now more likely than not that more people will be uninsured as 2014 dawns than before the law was implemented.

Behind all this is elitist central planning bureaucrats who designed a system that can provide subsidized preventative care ("prepaid care") as well as true insurance (against unlikely and expensive medical events) to the unhealthy and poorer underinsured. The cost is partly subsidized by a large number of new taxes, which hit everyone but are most noticeable for the wealthy; and partly subsidized by increases in premiums for everyone who is unsubsidized. Many people just above the subsidy cutoff of 400% of the poverty line will be paying 40-100% more in premiums for less coverage, which is so out of line for their budgets that many of them will have to go without insurance in this new order. This is the "cross subsidy" - forced new revenue to the insurance companies to pay for community rating and must-issue.

Another misleading spin point is that only 4% of the population is effected. The Administration hopes people will buy this new lie, but by delaying employer provisions for a year they hope you won't realize that a wave of changes, cancellations, and price increases will arrive next year for the supposedly unaffected 85% of the population covered by employer plans. Since they lied to get it enacted, why would anyone believe their fallback lies? Those who are involved in HR discussions know the truth.

I have no doubt that most of the politicians supporting the ACA were told it would work well and ultimately save money. It takes awhile for those who declared their support to admit they were wrong and start to work with critics to fashion a better plan - which might look like Switzerland's, which includes compulsory catastrophic insurance for everyone at a low price (subsidized for the very poor), with an accompanying book of medicaid-like reimbursements for those who don't have additional insurance. Democrats need to eat crow and start rewriting the ACA, quickly, or the outcome will be ugly.
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